Broker tips: ARM Holdings, Just Eat, IAG

13th Jul 2015 14:19

(ShareCast News) - JPMorgan Cazenove downgraded ARM Holdings to 'underweight' from 'neutral' and cut the price target to 900p from 950p."With key semi end markets such as smartphones, tablets and PCs (where ARM is exposed to multiple peripherals) slowing and consensus not reflecting the slowdown we downgrade," said the bank.It said ARM has benefited in the first quarter of this year from a shift to 64-bit architecture which has higher royalty rates and this benefit should have continued in the second quarter. However, smartphone and tablet markets have perceptibly slowed in the second quarter, it said.JPM noted that when faced with a Samsung slowdown related inventory correction in the first half of 2014, ARM reported royalty growth of only 8.2% for 2014, versus 20% in previous years. Shares in Just Eat rallied 5% after JPMorgan Cazenove moved to an 'overweight' stance and introduced a 550p price target on the stock, saying the takeaway food website was its top pick in the European online space.Following a period during under which it was unable to publish a rating, the bank said it had integrated the acquisition of Australia's Menulog into its estimates for the company, which lifted its 2016 EBITDA forecast by 20%.JPM sees several potential catalysts for the stock. It expects the group's first-half results on 4 August to show that orders grew 42% year-on-year.The bank pointed to the possibility of further M&A. "In our view, even in-fill M&A would show management active in consolidating positions and continuing to support long-term growth, and therefore is likely to be well received by the market." International Consolidated Airlines Group rose to the top of the FTSE 100 after UBS upgraded the stock to 'buy' from 'neutral' and raised its price target to 700p from 580p.It said that since hitting a high of 617p in April, the shares have fallen nearly 20% and now represent a good entry point. The broker put emphasis on what it considers to be an attractive valuation and exposure to recovering UK, US and European markets, and said most of the heavy lifting at Iberia is done, with further benefits to come through in 2015.UBS said there is upside to forecasts given restructuring and potential further falls in the oil price and noted that this will be the first year the group pays a dividend.